The Spanish economy will show positive growth in the fourth quarter, said the country’s Prime Minister, after a flat third quarter prompted fears of another looming recession.

Jose Luis Rodriguez Zapatero also said that more reforms would be needed to strengthen the economy in 2011.

Among the new measures he seeks – to push back the retirement age to 67 from 65 by the end of January in order to reform the pension system.

It would be doing the country a disservice not to make these changes now, Zapatero said.He noted that the higher retirement age would be phased in gradually between 2013 and 2027.

The pension reforms havse already prompted unions to threaten a second general strike, after one was called in September.

He also cited that Spain had positive output in each of the first three quarters of the year.

“We still have decisive tasks ahead to consolidate and strengthen that growth,” he told reporters in a year-end review.

Spain's minimum wage was raised by 1.3 percent in 2011, Zapatero. The increase will bring monthly minimum pay to 641.50 euro. Zapatero also assured that state pensions would go up by at least the same percentage - and more for those receiving the smallest pensions.

Spain, the fourth-largest economy in the euro zone, is laboring under a 20 percent unemployment rate and has implemented draconian spending cuts to try to reduce the deficit from 11.2 percent of GDP in 2009 down to the EU-mandated 3 percent by 2013.

Zapatero said his government is on course to meet those objectives after a spate of labor market reforms and austerity measures.